TaxTMI 
TaxTMI 
2013 (9) TMI 50
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....nds. 30.1 This issue is common in both the appeals. Since the proportionate premium payable on redemption of bonds has been allowed by this Tribunal for the earlier year; therefore, by following the earlier orders of this Tribunal for the Assessment Years 1996-97 and 1997-98, this Tribunal has considered and decided this issue in paras 38.1 to 38.3 as under: 38.1 We have heard the ld DR as well the Sr ld counsel for the assesse considered the relevant material on record. The Sr ld counsel for the assessee has submitted that the amount of Rs. 6.42 crores mentioned in this ground is not correct and the correct amount is Rs. 5.46 crores. 38.2 At the outset, we note that this issue has been considered and decided by the Tribunal in assessee's own case for the Assessment Year 1995-96 in paras 45 to 45.1 as under: '45. The issue of disallowance of proportionate premium payable on redemption of bonds has been decided in favour of the assessee in its own case vide ITA No. 3698 & 3100/M/99 for the A.Y. 1994-95, order dated 13.2.2009, vide para 29, which is reproduced hereunder: 29. The second ground taken by the revenue pertains to propo....
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....sions of the Hon'ble Supreme Court in the cases of Challappalli Sugars Ltd [98 ITR 167 (SC)] and Jogta Coal Company Ltd [36 ITR 521 (SC)]. It is pertinent to note that during the course of the argument, the Ld.DR has not been able to point out any infirmity in the decision of the Ld.CIT(A). In view of that matter, the decision of the Ld.CIT(A) on this count is upheld. Grounds No 3 & 4 are dismissed. 5. Ground No. 5 relates to action of the AO in not excluding the profit of the USA Branch amounting to Rs.4,39,43,721/- from taxable profit and the direction given by the Ld.CIT(A) to exclude the same while computing taxable income of the assessee in India. It is noted that the ITAT in the assessee's own case in ITA Nos. 1878 & 1864 for the Assessment Years 1996-97 & 1997-98 has decided an identical issue in favour of the assessee and against the revenue. The relevant findings of the Tribunal in the said case are extracted here under: "56. We have considered the rival contention as well as the relevant material on record. We do not agree with the arguments of the Assessing Officer that the income of the Branch Office of the ....
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.... tax and excise matter and the same allowed by the Ld.CIT(A). It is observed that the Ld.CIT(A) has decided this issue by the relying on the decision of the ITAT in the assessee's own case for the Assessment Years 1993-94, 1994-95 & 1995-96. Since the revenue has not brought any differentiating material as regards the facts for the year under consideration, we do not find any infirmity in the decision of the Ld.CIT(A) on this count. Accordingly, this ground is decided against the revenue and in favour of the assessee. Ground No. 8 is dismissed. 9. Ground No. 9 relates to the action of the AO in disallowing the estimated expenditure of Rs.39,95,287/- for earning exempt dividend income and the same allowed by the Ld.CIT(A). It is observed that the Ld. CIT(A) has given the relief to the assessee by following the order of ITAT in the assessee's own case for the Assessment Year 1993-95 and also by relying on his own order for the Assessment Years 1994-95 & 1995-96. It is noted that no fresh investments have been made by the assessee in the current year and all the investments have been made in the earlier years and the assessee has sufficient capital and the free reserves for making in....
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....ed the claim of the assessee on the ground that this is not actual loss incurred but has resulted as a result of conversion of foreign exchange asset and liabilities at the rate prevalent on 31.3.1998. Since the exchange fluctuation loss pertains to the business operations i.e. to import raw material and spare parts, export sale proceed receivable etc., and it is incurred in respect of trading asset/liabilities in the normal course of business, which are part of circulating capital or working capital; therefore, the same is allowable in view of the decision of the Hon'ble Supreme Court in the case of Wood Ward Governor India P Ltd. (supra). Accordingly, we do not find any error or illegality in the impugned order of the ld Commissioner of Income Tax (Appeals), qua this issue. 51. In the result, the appeals filed by both the assessee as well as the revenue are partly allowed." In view of the matter, we do not find any infirmity in the decision of the Ld.CIT(A) on this ground and the same is upheld. Ground No. 11 is dismissed. 12. Ground No. 12 relates to the action of the AO in taxing interest received from the Income Tax Department of Rs.22,35,44,844/- for various assessment ye....
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....r generated units are eligible for deduction and directing the AO to recompute the profit of the Vikram Power Unit in accordance with price per unit of power and determine in his order for AY 1998-99 for the purpose of deduction from the book profit without appreciating that the assessee company and Vikram Power Unit are not independent units and, therefore, not entitled for deduction of profits of these units from the book profits." This ground is linked to the additional sub ground no 6.4 raised by the assesse at para 24 infra and the said ground is allowed in favour of the assessee by relying on the decision of the ITAT in the assessee's own case in ITA No. 5630/Mum/2002 for the AY 1998-99. In view of that matter, ground no 14 is dismissed. 15. Grounds No. 14 reads as follows: "15. On the fact and in the circumstances of the case and in law, the CIT(A) erred in allowing the assessee's ground of appeal that the amount of carried forward unabsorbed depreciation for the A.Y. 1999-2000 should be increased by the amount of total income brought to tax by virtue of the provisions of section 115JA of the I.T. Act relying upon the decision of the Hon'ble Guwahati High Court in the cas....
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....ne expenses. It is observed that the ITAT in ITA No. 3100/Mum/1999 in the assessee's own case for the Assessment Year 1994-95 and in ITA No. 5630/Mum/2002 for the A.Y. 1998-99 has decided a similar issue in favour of the assessee respectively in paras 32-35 of the said order. It is also observed that similar nature of expenses have been allowed by the AO himself in the assessment from A.Y. 2005-06 on wards. We, therefore, following the said orders of the ITAT and the consistent stand taken by the department in the earlier years decide this issue in favour of the assessee. Ground No. 3 is accordingly allowed. 19. Ground No. 4 relates to the decision of the Ld.CIT(A) upholding the action of the AO in disallowing proportionate amount of debenture issue expenses of Rs.22,70,833/-. . It is observed that the ITAT in the assessee's own case for the A.Ys from 1986-87 to 1989-90 has decided a similar issue in favour of the assessee. In the absence of any contrary facts brought on record by the Revenue, we, following the earlier orders of the ITAT accordingly decide this issue in favour of the assessee. 20. Ground No. 5 relates to the decision of the Ld.CIT(A) upholding the action of the A....
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....hold the decision of the Ld.CIT(A) on this count. Accordingly, Sub Grounds No. 6.1a and 6.2 are allowed. 23. Sub Ground No. 6.1b relates to provision for debenture redemption reserves. The AO did not allow deduction towards provisions made for redemption of debentures on the ground that the same is a capital item. It is pertinent to note that the Hon'ble Supreme Court in the case of National Rayon Corporation Ltd 227 ITR 764 has held that by issuing debentures, the assessee had received loan against the security of its assets and though the loan may not be repayable in the year of account there is an obligation to pay the loan which is a known liability therefore, the debenture redemption reserve cannot be treat as a reserve and to be considered as a provision for meeting an ascertained liability. Following the said decision, we are of the considered opinion that the authorities below are not correct in holding the same as capital item. Hence, the addition made on this count is deleted. Accordingly sub ground 6.1b is allowed. 24. Ground No. 6.3 relates to profit eligible for deduction u/s 80HHC. In the assessment framed the AO has not allowed deduction of export profit on accou....
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....relates to profit eligible for deduction u/s 80HHC. In the assessment framed the AO has not allowed deduction of export profit on account that the assessee is having indicates income in the company as a whole. On appeal the Ld.CIT(A) directed the AO to recompute the deduction of export profit for the limited purpose of section 115JA in accordance with the circular no. 680 dated 21.02.1994 of CBDT. This ground is linked to para 13 supra regarding the adjudication of ground no 13 of the Revenue's appeal. Since we have upheld the decision of the Ld.CIT(A) while rejecting the ground of the Revenue as discussed in the said para, the AO is accordingly directed to allow the deduction as per law. 25. Ground No. 6.4 relates to recomputation of profits of Vikram Power Unit. It is noted that the ITAT in the assessee's own case in ITA No. 5630/Mum/2002 for the Assessment Year 1998-99 has decided an identical ground in favour of the assessee at paras 13 to 15.2. In the absence of any distinguishing facts brought on record by the revenue, we, by following the said decision, decide this issue in favour of the assesse and against the department. Ground No. 6.4 is allowed. 26. Vide letter dated 2....